Ethereum (ETH) is at a crossroads right now, and things are looking tense for investors.
This year has been rough for ETH, with some big players taking a hit. One of the most notable is WLFI, an institutional investor tied to former President Donald Trump. With 65% of their crypto portfolio tied up in ETH, the recent slump has led to a massive $110 million loss. While some are eyeing the dip as an opportunity to buy, others are more hesitant, unsure whether the bottom is in.
However, despite these losses, the outlook for Ethereum’s future remains optimistic. Last week alone, a whopping $1.8 billion worth of ETH left exchanges, hinting that investors are holding strong. Now, as Ethereum enters a critical 21-day period, all eyes are on whether it can avoid a fourth consecutive month of losses—a rare and troubling trend.
Institutions Feel the Pain as Ethereum’s Price Struggles
The recent downturn in Ethereum’s price is hitting institutional investors hard, with WLFI taking one of the biggest blows. With over $15 million of their $77 million portfolio invested in ETH, they’ve seen a 6.15% loss just in a single day. The 5.78% plunge in ETH’s value alone is mostly to blame for this hit. Other assets in WLFI’s portfolio, like STETH and WBTC, are also seeing red, adding fuel to the fire.
At the time of writing, ETH was trading just below $1,901, a slight rebound, but still well off its highs. On-chain indicators are sending bearish signals. The Relative Strength Index (RSI) is hovering around 31, indicating that ETH is oversold, while the Moving Average Convergence Divergence (MACD) remains deeply negative, suggesting the selling pressure is far from over. On-Balance Volume (OBV) has flattened, showing that there’s little buying interest. For ETH to avoid further losses, it’s crucial to break through the $2,100 mark—anything lower could lead to more downside.
Long-Term Holders Stay Strong Amid Short-Term Woes
Despite the rough price action, long-term Ethereum holders aren’t panicking. In fact, there’s been a massive outflow of ETH from exchanges—over $1.8 billion in just one week. This reflects a growing trend of investors preferring to hold their ETH in self-custody, likely in anticipation of the upcoming upgrades and Ethereum’s role in the expanding DeFi and tokenization space.
This behavior mirrors what we saw at the bottom of the market in 2022, where big players used the dip to accumulate, and the market later rebounded. While short-term sentiment is cautious, these outflows show that many investors remain confident in Ethereum’s long-term prospects. For those seasoned in the market, this dip isn’t a red flag but a chance to buy at a discount.
The 21-Day Countdown: Can Ethereum Break Its Losing Streak?
March might be Ethereum’s last chance to break a rare four-month losing streak, something we haven’t seen since the bear market of 2018. After a solid 46.28% rebound in February, Ethereum needs to keep that momentum going through the rest of the month. If it can’t, we might see a psychological downturn that could shake confidence even further.
Historically, March has been kind to ETH, with an average return of 20.03% and a median of 9.96%. But with two straight months of losses in 2024, investor sentiment is starting to wear thin. If Ethereum can’t finish the month in the green, it could trigger another wave of caution among retail traders, delaying any potential recovery.